Strategic Minerals reports strong 4Q20 at Cobre
(SML ) has reported ‘strong’ sales during the final quarter ended 31 December 2020 from the company’s ongoing Cobre magnetite operation in New Mexico, United States.
The company said sales ‘remained robust’ and that the positive annual growth highlights the strength of demand being maintained despite the ongoing Covid-19 pandemic.
Sales for the December quarter were US$0.747m, up from US$0.713m in the same period in 2019. Tonnage from the site increased to 12,845 tonnes from 12,202 tonnes in 2019. Annual production rose from 42,517 tonnes to 51,518 tonnes.
The producing mineral group said the strong quarter has resulted in year-on-year revenue growth of over 20% resulting in total revenue for FY20 above US$3m (FY19: US$2.5m) for the first time.
Meanwhile, the Leigh Creek Copper Mine approval process for mining the Paltridge North deposit continues, indicating the potential to recommence operations in 2021 while Cornwall Resources continues working with NRG Capital on progressing the Redmoor Project.
At present, and subject to the receipt of funding, the group does not believe that any issues identified will prevent planned mining and processing occurring at Leigh Creek in 2021.
It said strong copper prices and potential upside associated with producing copper sulphate at Lynda/Lorna Doone, continues to enhance the appeal of Leigh Creek to potential investors.
"Continued strong sales at Cobre, combined with the December capital raise, have placed the Company in a solid position to move forward in 2021,” said Managing Director, John Peters. Meanwhile, SML also announced the appointment of Karen Williams as CFO.
"I would like to thank our outgoing Chief Financial Officer, Julien McInally, for his numerous contributions to the Company's operations and wish him well in his future employment.
At the same time, I would like to welcome the Company's new Chief Financial Officer Karen Williams, who has already demonstrated her capacity to be a key member of the management team and provide strategic support to the Board,” commented Peters.
Shares in Strategic Minerals have traded sideways since July 2020 to Open today at 0.45p.Whilst early trading has reacted negatively to the protracted discussions to progressing the Redmoor tungsten project, progress for the PEPR at the Leigh Creek Copper Mine remains on schedule with the Company expected to announce further investment partners in the project once the PEPR is completed. The record sales at COBRE, in addition to the strong balance sheet post the December capital raise, clearly positions the company for growth in FY21 with significant positive Newsflow expected from the Group as projects in Cornwall and Australia progress.
Reasons to Follow SML
Strategic Minerals is a minerals production and development group focused on developing projects prospective for battery materials. In September 2020, it reported a swing to profit in the six months ended 30 June 2020 after posting a pre-tax profit of $0.26m.
Multiple Projects and Minerals
It is currently undertaking four major spheres of operations; the Cobre magnetite stockpile operation, the Leigh Creek Copper Mine, the Redmoor tin/tungsten exploration project and the Central Australian Rare Earths project.
In October 2020, SML announced a positive updated scoping study undertaken by Wardell Armstong that reported improved economics for the Redmoor tungsten and tin project.
Sales Ramp Underway
Today’s ‘strong’ December quarter follows a trajectory of recent growth at the Cobre magnetite operation in New Mexico after the group reported strong sales last quarter.
"Sales at Cobre continue to show excellent annual growth providing the Company the opportunity to repay outstanding liabilities and benefit from surplus cash generated from operations,” said John Peters, Managing Director of SML said in October 2020.
He added, “With copper prices around $3lb and the recent emphasis on the strategic nature of tungsten, the Board is confident that the underlying value in its projects will be realized."
Positive Newsflow Expected
Following the announcement of the improved LCCM project economics on 9 November 2020, the Company continues discussions with a number of parties that have expressed an interest in investing in the Leigh Creek project and expects to be able to ultimately conclude an agreement once the PEPR for the Paltridge North deposit has been issued.
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